What is the best type of short term investment?

Question

What is the best way to invest $50,000 for one year and get the highest yield with a very low risk?

Would you suggest a money market?

By the way I am not looking at long term investments. I will need to use the $50,000 but don't want to put it in a savings account. What should I do?

Long term investments are not an option for me with this money. Also I am looking for a somewhat low risk. Is a money market the way to go? Or would bonds be better for me?

Also I have zero experince in the stock market so day trading for me would be out.

Answer 1

Hmm, I consider short-term a Day Trade or maybe a few weeks. Thank you for better defining your terms in the explanation.

One of the first things they teach in Econ 101 is that with increasing yield, there is increasing risk.

A savings account has almost no risk, so the yield is negligible. A CD has very little risk, so the yield is small. A gov't bond or note has a little more risk, and little more yield. A corporate bond has more risk, so it has more yield.

The stock market is probably double the risk of a bond, so it has a probability of double the return of a bond.

Futures and commodities and currencies are riskier yet, mostly because of the leverage, and so you see how it goes.

The "best" investment for you depends on your risk level, your knowledge and expertise. These are subjective terms and different for everyone.

Until you get more specific and define your terms, you will not be able to make an informed decision.

Answer 2

For a short term investment a money market account for your 50k might be the best investment only if you are going to need that money is less than one year. If you know that you will have no need for any of that money in less than a year - then an one-year certificate of deposit (CD) would make more sense possibly because your should be able to get a higher interest rate with the CD over the money market account. Personality - with the acception of retirement money's - I don't like to lock up my own money so although I might receive less money because I choose to use a money market account over the CD - I would still use the money market account. The stock market is never a low-risk investment tool and I would suggest you stay away from it as a short-term investment vehicle.

I hope my answer is of some use to you.

Answer 3

Bonds and the stock market have more than a 'very low risk'.

Right now you can find money market accounts and CDs that are paying more than 5%. These provide return with virtually no risk.

A CD is likely to get a better return than a money market account because you can lock in a rate. It is more likely that interest rates will go down than up in the next year, so locking in a rate would probably be to your advantage. CDs have terms other than one year, so consider a six month, or other term if it fits your needs better .

I recommend doing a little research about CDs and the strategy of laddering at bankrate.com.

Answer 4

Ive been a trader for 15 years now. Ive traded stocks commodity futures and without a doubt currency trading is the best vehicle by far other you pay commissions currency you dont.Ive developed a system using everything that has happened during the time of the stock market being opened i look at certain factors and with %80 accuracy consistetly this formula tells me which way the british pound will go against the us dollar it may seem a little confusing but its not.When i first learned of this i opened a small forex account which if you dont know is a currency account in 2 plus weeks i turned $500 into $3600.Im so confident in this i got myself a website and began offering for free to get clients because everybody wants to make money with small risks. i put in stop orders so if it goes against us which rarely does we only lose a portion of our account.On sept.19th i began advertising my site and offered free to those who visited which way the pound would go.We used an imaginary $500 investment everyday i posted our profit or loss and in 7 days the balance is now $1506.You can start a forex account with as little as $300 unfortunately tonight is the last night im giving my prediction for free.the site is www.moneyinthebank. after moneyinthebank. add instantecom.net the computer wont allow me to add the whole webaddress.click on day trading currency p.s. start small you will see this works i use a mathematical formula a pt system thats why i feel so confident then gradually invest more with your profits.

Answer 5

Your criteria would lead you right to a CD - certificate of deposit.

To find the one with the highest yield and lowest risk I suggest that you go to the local library and get a copy of a newspaper like the Wall Street Journal, or Investor's Business Daily .....

why?

In it there are advertisements geared towards investors with deep pockets who have the money to throw at higher yielding CD's. And in there you will find percentages that would beat most competitors in the nation as they are both widely read prints.

Good Luck

Answer 6

T-bills are your best bet. Open an account with the treasury department, send them your $50,000 and buy 6 mo t-bills. At the end of 6-mo roll them over into new 6-mo t-bills. They are sold every Monday. Pay about 5.1% interest which is free from state and local taxes. Money market is not.

Answer 7

Mate, it's great you have $50,000 but I know of a way whereby you only need to invest $499 to make an insane amount of money.

If you're interested and have a great eye for investment and business check out www.itvventures.com/chirag

This company is absolutely about to explode and you can make loads of money. They're going to kick off from 30th September and will be spending $55 million annually just in marketing.

Imagine the kind of traffic and exposure they will be getting with that sort of marketing dollar.

I don't want to say much but just check out their website, powerpoint presentation, download and listen to the conference calls and you'll see what I mean.

If you really can see the potential this has then you would know they sky's the limit and making over $10,000 each month is very possible and only for an initial investment of $499.

Cheers.

Answer 8

There is a market that many don't realize how easy and fast pace it can be. The forex market or foreign exchange market.

Foreign exchange is the buying and the selling of foreign exchange in pairs of currencies.

For example you buy US dollars and sell UK Sterling pounds or you sell German Marks and buy Japanese Yen.

Why are currencies bought or sold?

The answer is simple; Governments and Companies need foreign exchange for their purchase and payments for various commodities and services. This trade constitutes about 5% of all currency transactions, however the other 95% currency transactions are done for speculation and trade.

Below is 2 links for more information

Good Luck Auggie
MyTurnkeyBusiness.com

Answer 9

In the U.S.A., I'd say a Certificate of Deposit as your best bet. Of course, a money market might get you close to the same rates and be available instantly as well. Ask your banker or your bank's financial advisor.

Answer 10

i would suggest long term investments . ..diversifying, and seeing a professional financial advisor.